MON Analysis

Monsanto Co. (MON)

MON publishes earnings on Wednesday before the opening bell.

I shall use options that trade for the last time 10 days hence, on Oct. 13.

Implied volatility stands at 11th%, which is 1.1 times the VIX, a measure of the volatility of the S&P 500 index.

MON’s IV stands in the 30th percentile of its annual range and the 58th percentile of its most recent broad movement.

The price used for analysis was $119.93.

The options grid shows the shorts at $120, with the highest liquid long calls at $122, ora 33 delta with a 68% chance of expiring out of the money. This is way too narrow a range. I aim generally for around 90%, with a 10 delta.

Decision for My Account

The lack of liquidity on the options grid puts any possible iron-fly trade below my standards. I am passing on MON without further analysis.

By Tim Bovee, Portland, Oregon, October 3, 2017


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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